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Model Question of Finance Grade XI (11) 2073 (2016)

Model Question of Finance

important question for finance grade xi

Subject: Finance | F.M.: 100

P.M.: 35 | Time: 3 hrs

Candidates are required to give their own words as far as practicable. The figures in the margin indicate full marks.

All questions are compulsory.

  1. Define finance. State its relationship with Economics. [2+3=5]
  2. Write the meaning of financial intermediary. Briefly write the types of financial intermediaries present in Nepal. [2+3=5]
  3. Write about the role of financial institution in Financial Market. [5]
  4. What is a Commercial Bank? What are its major functions? [4+6=10]
  5. Write short notes on: [2.5+2.5=5]

a. Treasury bills

b. Bills of exchange

6. The balance sheet of a company as on 31st December, 2016 is given below. [3+2=5]

Find Out

a. The book value of Company.

b. The book value per share.

7. a. A Treasury bond that matures in 10 years has a yield of 6 percent. A 10 year corporate bond has a yield of 8 percent. Assume that the liquidity premium on the corporate bond is 0.5 percent. What is the default risk premium on the corporate bond? [Ans: 1.5%] [5]

b.  The real risk-free rate is 3 percent and inflation is expected to be 3 percent for the next years. A 2-year treasury security yields 6.2 percent. What is the maturity risk premium for the 2-year security? [5]

8. a. Find out the percent value of Rs. 5,550 due in 3 years at a discount rate of 6 percent. [2.5]

b. Find out the future value of an initial Rs. 10,000 compounded for 2 years at 8 percent. [2.5]

c. You approach Nepal Bank Limited for a term loan of Rs. 500,000. The bank agrees to give the loan to be fully amortized in a period of 5 years at 10 percent, annual payment. Calculate the size of each installment. [5]

9. Following are the cash flow streams of investment proposals X and Y.

a. What is the percent value of cash flow stream from proposal X if the discount rate is 8 percent? [8]

b. What is the future value of cash flow stream from proposal Y if appropriate compound rate is 9 percent? [5+5]

10. What is meant by risk? Write about the important of Pure Risk? [3+4]

11. Write the meaning of insurance. What are its principles? [3+5]

12. What are the essential elements of Life Insurance Contract? [5]

13. Ms. Sangeeta is willing to pay one year life policy of Rs. 3,00,000 from Rastriya Beema Sansthan. She is now 30 years old. Assume the probability that a person’s age 30 years will die during the year is 0.6 percent and cost of money is 8%. What is the fair amount of premium Ms. Sangeeta must pay for this policy? [5]

14. Discuss the important types of Non-life insurance and state their contribution in business. [10]

Note: All these questions are copied here from the third party management students are requested to take this information at their own way.

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